That would be huge if Viacom CEO Philippe Dauman’s prediction is accurate — although he declined to elaborate in his presentation today at the UBS Global Media and Commmunications Conference. Viacom reportedly has talked with Sony about teaming up to offer an online service that would include the same kind of channels that now are only available to cable and satellite TV subscribers. Many programmers fear that a national online service could undermine their ability to sell their channels in bundles that require people to pay for services that they don’t watch. Intel met stiff resistance from cable networks when it proposed to introduce what’s known as an over-the-top service, and now wants to sell its technology. READ MORE »
Paramount will continue to ride movie franchises Mission Impossible, Star Trek, GI Joe, and World War Z and roll out animated films for SpongeBob SquarePants and Monster Trucks, the company told analysts this morning as execs offered a rosy picture of Viacom’s growth prospects. CEO Philippe Dauman also crowed about the attention that Miley Cyrus’ sexually charged dancing brought to MTV’s Video Music Awards in August, calling it a “moment that is still reverberating across the pop culture landscape.” But some investors likely will be more concerned about the company’s acknowledgement that the original programming planned for its pay TV networks will drive costs up by a high single digit rate in 2014. “Original programming gives us the ability to build our brand better,” Dauman says. “It creates a lot of value for us.” In addition, Viacom says that its stock repurchases — which accelerated to $2.7B in the September quarter — will come closer to $850M in the three months ending in December.
The company’s leading Wall Street critic, Bernstein Research’s Todd Juenger, raises the provocative idea this morning in a report that questions whether Viacom‘s stock — now hovering around its all-time high — can continue to rise. The share price has appreciated 55.4% so far in 2013 as investors grew confident that the company had reversed a startling decline in Nickelodeon’s ratings that began to show in late 2011. CEO Philippe Dauman says the turnaround largely reflects the success of new programs including Teenage Mutant Ninja Turtles. But Juenger says this morning that the ratings gains — and improvements in ad sales — are about to slow. Nickelodeon benefited in part because it began to target pre-Kindergarten viewers from 8:30 AM-2 PM — loading up on programs such as Dora The Explorer, Umizoomi, and Bubble Guppies – while Nick Jr focused on franchises “with arguably less audience appeal.” As a result “Nick Jr. lost about 250-300k average daily viewers [while] Nickelodeon gained about 100k.” Meanwhile, Nickelodeon squeezed SpongeBob SquarePants which now accounts for 45% of the channel’s programming hours, up from 25% in January 2012. “We know of no other network that relies so heavily on one single franchise,” Juenger says. It’s “undeniably risky to be so dependent on one franchise, especially
That doesn’t necessarily mean Viacom will skimp on spending where needed, CEO Philippe Dauman told investors at the Goldman Sachs Communacopia Conference. For example, Paramount has a new Transformers film planned for next year that has “a very high budget but very low risk. Same with Mission: Impossible and some of the other franchises.” With new versions of its latest franchise, World War Z, “we will alleviate the risk by bringing in co-financing.” Broadly speaking, though, “we have a history even in tough times of maintaining or growing margins” and that means keeping “a tight lid on expenses, including in programming.” At the movie studio Dauman expects to distribute about 15 films a year including three animated titles in 2015. But he adds that he’s “excited” about next month’s Jackass Presents: Bad Grandpa with Johnny Knoxville, which Dauman calls “a fun movie, and a profitable one.” He’s also optimistic about Paramount’s revived television production operation.
Pay TV distributors who believe that the decks are stacked against them in retransmission negotiations with major content producers should take a look at the 180-page media and entertainment report out today from International Strategy and Investment Group analyst Vijay Jayant. He urges investors to buy shares of AMC Networks, CBS, 21st Century Fox, Time Warner, and Viacom. He’s neutral on Discovery, Disney, and Scripps Networks. The big reason: These eight companies, he says, “control 90% of total TV viewership and 60% of total film production in the U.S., which means that, for the most part, they have the power to determine how content is packaged and priced to distributors and, therefore, consumers.” That muscle will be evident over the next few years as they squeeze cable and satellite companies to pay $60B in carriage fees for their channels in 2016, up from $45B this year. These payments “are drivers for the overall sector.” Factoring in “the consumer’s inherent psychological need for entertainment (even during tough times),” Jayant predicts healthy profits for his eight companies, with annual average returns on invested capital over the next three years ranging from 40.1% for AMC to 9.9% for Time Warner.
LOVEFiLM, an Amazon company, today announced the arrival of hundreds of hours of popular reality TV series, comedy and children’s entertainment on the LOVEFiLM Instant streaming service following a deal with worldwide entertainment leader Viacom International Media Networks (VIMN). The wide selection of new shows will allow members of LOVEFiLM Instant in the UK to experience some of the greatest entertainment from across VIMN’s exciting broadcast portfolio – which includes MTV, Nickelodeon, Nick Jr. and Comedy Central.
It just might if it frightens them enough to accelerate their efforts to make people pay for broadband based on how much they use — the same way they pay for electricity or water. ”This isn’t just a side show,” independent analyst Craig Moffett says. “This is THE central issue defining the value of the cable industry going forward.” And the pricing model could rock streaming companies including Netflix or, perhaps, Sony. It would be “a material risk” to Netflix’s prospects if a Sony-Viacom agreement leads to usage-based pricing, Bernstein Research’s Carlos Kirjner says.
Listen to (and share) episode 48 of our audio podcast Deadline Big Media With David Lieberman. David talks with host David Bloom about Fox’s big bet on the pay-TV status quo with its heavily promoted Fox Sports 1 channel launch; a possibly game-changing deal in the making between Viacom and Sony Electronics; and that big “for sale” sign hanging around the metaphorical neck of troubled phone maker Blackberry.
This could be a big breakthrough for tech companies that want to create an Internet-based alternative to traditional cable and satellite services. The Wall Street Journal reports that Sony has a preliminary agreement to carry Viacom‘s channels on a service it hopes to launch by year end. The programming would initially go to those with Sony devices including its PlayStation gaming console and Bravia HDTVs, with tablets and smartphones to follow according to “a person familiar with the matter.” If Sony and Viacom complete their deal it would be the first time a major programmer has agreed to provide its most popular pay TV channels to an online service. Intel and Google are among the other companies hoping to use the Internet to challenge cable and satellite video offerings. Sony’s talking with other programmers including Disney, Time Warner, and CBS.
The Daily Show fill-in host John Oliver bows out after tomorrow night. He’s been covering for Jon Stewart since June 10, while Stewart took time off to direct his first film, Rosewater. Oliver’s been getting great reviews for his guest gig. And though this past Monday he told PBS’ Charlie Rose, “I don’t think it’s going to change my life”, and that his goal had been only “not to destroy that machine” during his brief tenure, it’s been a game changer for Viacom Entertainment Group president Doug Herzog, whose empire includes Comedy Central, and who has learned from the experience that there can be life after Stewart. Not that anyone’s making plans to replace Stewart — but it’s got to be nice to know The Daily Show won’t fall off a cliff should the much-loved host who’s been the face of the franchise since January 1999 ever decide it’s time to move on.
The debt offering takes advantage of the market’s low interest rates, and will help fuel Viacom’s recently announced plan to double its stock repurchase effort to $20B — including $3B to take place in 2013. The decision to …
UPDATED, 11:14 PM: YouTube today dismissed the support that IATSE, the DGA, AFM and SAG-AFTRA has shown for Viacom’s efforts to get another day in court with its $1 billion copyright infringement suit. Not only does the Google-owned company say in a statement that the unions’ brief “recycles” a previous filing from 2010 in the suit but that they “don’t seem to have followed developments in the case.” Read the statement YouTube issued via a spokesperson late Monday below:
The brief filed by entertainment industry unions recycles their brief from the first appeal in 2010. They don’t seem to have followed developments in the case or recognized the changes to YouTube’s place in the entertainment ecosystem. The Court has twice rejected Viacom’s unfounded copyright infringement claims. And even Viacom has conceded it doesn’t object to how YouTube has operated for the last five years. YouTube has signed licensing agreements with every major movie studio and record label, has developed an industry-leading Content Identification system used by 4,000 media partners, and does more to prevent piracy than any other major video hosting provider.
PREVIOUSLY, 6:33 PM: Despite another recent court loss, Viacom’s latest attempt to revive its billion-dollar copyright suit against YouTube has just gotten some very vocal support again from some old friends. “YouTube’s role in the rampant, systematic distribution of content in violation of the exclusive rights of copyright holders caused and continues to cause harm to the entertainment industries and the members of the Guilds and Unions working in those industries,” said a joint brief filed late last week by lawyers for the Directors Guild of America, SAG-AFTRA, IATSE and the American Federation of Musicians. “We urge the Court to consider the full ramifications of YouTube’s actions, and request that the Court reverse the lower court’s decision.” The unions offered similar such support as they did last week back in 2010. Filed on August 2 this year, the quartet’s new 28-page brief (read it here) comes after Viacom filed materials on July 30 with the 2nd Court of Appeals asking for a new judge in the long-running case. That expected legal move against Judge Louis Stanton followed the NY-based U.S. District Court judge granting YouTube yet another favorable summary judgment in the matter on April 18. That was the second such decision for the Google-owned entity in the case. Viacom first launched the $1B action in 2007.
Listen to (and share) episode 43 of our audio podcast Deadline Big Media With David Lieberman. Deadline’s executive editor talks with host David Bloom about the big Hulu non-sale announcement; Tribune’s next step out of bankruptcy; drooping broadcast ad prices; the Apple e-book loss; and Viacom bear changes his rating, but with a big caveat.
Did hell just freeze over? It must have, because this morning Viacom‘s most relentless naysayer on Wall Street, Bernstein Research’s Todd Juenger, upgraded the stock to “market perform” from “underperform” raising his target price to $73 from $64. It’s …